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How does geopolitical risk affect international freight?

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  • Liu, Ke
  • Fu, Qiang

Abstract

Geopolitical uncertainty has become a salient risk to international freight. In this study, we investigate the impact of the geopolitical risk on air freight volume, sea freight volume, and road freight volume, respectively. The findings reveal that the effect of geopolitical risk on the three types of international freight is negative and statistically significant. However, a significant difference exists in the elasticity of impact, with sea freight exhibiting the highest elasticity to geopolitical risk, road freight demonstrating the lowest elasticity to geopolitical risk, and air freight presenting moderate elasticity to geopolitical risk. The heterogeneity test indicates that the impact of geopolitical risk on international freight was most significant from 2001 to 2005 compared to before 2001 and after 2005. The mechanism study explores that the negative effect of geopolitical risk on international freight transportation is moderated by international commodity trade.

Suggested Citation

  • Liu, Ke & Fu, Qiang, 2024. "How does geopolitical risk affect international freight?," Journal of Air Transport Management, Elsevier, vol. 118(C).
    • Handle: RePEc:eee:jaitra:v:118:y:2024:i:c:s0969699724000796
    DOI: 10.1016/j.jairtraman.2024.102614
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